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Welcome to London Civic Watch

"Ever wonder if City Council is as contentious and chaotic as it is sometimes portrayed? Here you can get a progressive perspective on some of the issues from someone who spent four years in the trenches. Totally unbiased, though!Feel free to comment but keep it respectful, just like they do at council."

Tuesday, June 26, 2012

Of zeroes, cutters and snakes

Three messengers with one message to council: make a
five-year plan for budgeting and stick to it. The current budgeting by the seat
of your pants just isn’t workable.

The three organizations—the Chamber of Commerce, the London
Public Library and the London Transit Commission—may have different areas of
interest but they do have this in common: whether representing business or
public services, they have to be able to plan ahead and know what they have to
work with.

The current council, with its obsession with a zero tax
increase and its tendency to make policy on the fly, is making it impossible
for private and public businesses to allocate resources in a measured and strategic
way. As all three pointed out, this council has moved from a five year plan to
a year over year approach to spending and the various agencies and departments
don’t even know how much they have to spend until well into the new year, when
one-sixth of the budget year has already passed. It makes it hard to look ahead
and get the best bang for your buck.

This message was echoed by city treasurer Martin Hayward
when he appeared before the Strategic Priorities and Policy Committee on Monday
afternoon to present a report on the 2013 budget. After the fiasco of the 2012
budget hammered out a few months ago, when council managed to bring in a zero
percent increase by raiding the reserves and using a number of forms of one
time money, including the surplus, council members asked staff to bring back
information providing three possible scenarios for 2013: a budget with a 3.8%
increase over 2012, another at 2%, and finally one a 0% increase.

This Hayward and his staff had provided. The presentation
noted that to maintain services at their current levels would take a 5.5%
rate increase. After all, $8M had been carved out of the budget in 2010 and
another $16M in 2012. To continue along that path would require chopping
another $25M. Even at a 3.8% increase, $8.1M would have to be found in cuts or
increased revenues, and at a 2% tax increase, another $8.3M on top of that. No
matter which of the three scenarios was chosen, there would be cuts.

And it’s not as if you can order cuts across the board. For
the last four years, the civic administration has been held at a zero per cent
increase because the boards and commissions are often untouchable because of
legislative requirements. You just can’t cut them. And even if you can, the
council has often been reluctant to do so, particularly in the case of the
Police Services Board. So, if you are to achieve an overall zero, some areas
will actually have even deeper cuts in order to allow others to get more.

Hayward stressed the need for multi-year budgets. He had
costed them out for the next five years.

“All boards and commissions agree that
we need to develop multi-year target,” he advised, pointing out that doing so sets
the expectations of community in line with economic realities. “I don’t
recommend clipping and shaving,” he quipped. “You get a funny haircut that way.”

His presentation had been brief, but packed with information
about the impact of the decisions they would have to make.

Bill Armstrong kicked off the question. He cut to the chase
pretty quickly. How many layoffs would there be under each scenario? He had noted that 73 police officers jobs would be gone under the zero tax increase. But
what about the civic administration and other boards and commissions? How many jobs would be lost there?

Hayward didn’t want to hazard a guess; he hadn’t done the
budget. There would be some, you couldn’t couldn’t do it without some cuts.
Certainly any decrease in service hours would affect casual employees. But he
didn’t want to set panic throughout the organization.

Steve Orser didn’t like any of the scenarios. He wanted to
see one which allowed for selling off city assets. That way they could pay off
debt and save on the carrying charges. He had in mind the convention centre.

Hayward reminded him that once you take out a debenture, you
are locked in. You can’t just pay it down. What you can do is avoid taking on
new debt with money you have on hand. Unfortunately, during the last budget
debates, the majority on council had insisted on using money that is normally
used to avoid debt—the surplus and contributions to the reserves—to bring in a
zero per cent tax increase. Besides, it takes time to sell assets and forestall
debt, so it wouldn’t be much help for the 2013 budget.

Orser also thought that a potential windfall from the
Western Fair Board in the form of the OLG revenues should be thrown into the
mix. Hayward suggested that, until he had a firmer deal in hand from OLG, he
wouldn't want to gamble the city budget on that.

Dale Henderson was excited and didn’t want to be depressed
by what he was hearing. He had a number of solutions to the dilemma. There was
a great opportunity since most of the managers were new to their jobs and could
be told what to do. They should rent buses instead of buying them or sell stuff
and rent it back. Assessments went up every year; that was money that could be
pocketed; it didn’t require the city to raise the rates. They could contract
out some services, they could hire more engineers instead of hiring consultants,
there was money coming from the naming rights to the JLC. They wouldn’t have to
make any service cuts and could build a ring road.

The ideas came fast and furious; I couldn’t keep up with
them all. I do know, however, that changes in assessments are revenue neutral.
While they may make some shifts in what an individual property owner pays, they
have no impact on the revenue that goes to the city.

Denise Brown, too, thought that service cuts could be
avoided. Why not introduce a green bin program but reduce the frequency of
garbage pick up?

This in fact had been recommended to council years ago but
it takes a financial outlay to get started and time to implement. This council
doesn’t have either the time or money to put this in place for 2013.

The mayor had his own complaints. The council had done a
great job, save the taxpayers hundreds of dollars. The problem was the funding arrangements.
Getting only 8 cents of every tax dollar was not sustainable. The higher levels
of government had to pony up. And nowhere in the projections did he see council’s
plan to increase assessment growth to two or two and a half per cent. And what
about private sector investments? And didn’t they have an $8M surplus last
year? All of this should be factored into the revenue side of the equation.

Hayward reminded him that assessment growth, unless it comes
from intensification and infill development, requires additional services. You
can’t just decide to collect taxes from new subdivisions and not pick up their
garbage or clear their streets. As for the surplus, it accounted for less than
1% of the total budget and was composed primarily of one time occurrences such
as unexpected revenue or an unseasonably mild winter. You can’t count on it for
subsequent years. As for privatizing, it still costs money whether you contract
out or do stuff in house. And, in some areas, such as snow clearing, you still
need a basic stock of plows and operators, although they may be supplemented by
contracted services.

Joe Swan seemed to think the problem was that the boards and
commissions were unreasonable and wouldn’t cooperate with the city to share
resources and save money. Hayward reminded him that they are boards and
commissions for a reason and have their own legislative requirements. From his perspective,
the city had very good relationships with all the boards and commissions.

But Swan was dubious. He wondered why the boards and
commissions didn’t have to justify their increases. Why they didn’t just
accommodate to a zero increase within their existing budgets, in short to suck
it up (my expression)?

Paul Hubert identified the real issue: were they going to
identify a target tonight? He saw no point in staff wasting its time preparing
more detail around budgets in which council had no interest.

Orser disagreed. He wanted to see a budget that took into
account a potential sale of assets. Everything should be on the table.

Joni Baechler was fed up. Budgeting for this council was
like a game of Snakes and Ladders, she felt. Every move forward was undermined
by an even greater reversal. They had approved master plans and initiatives
only to gut the very systems they had endorsed. She pointed out the letter from
the Chamber of Commerce asking for long term planning. She had served on the
Service Review Committee whose new job it was to prepare the budget for council
since its inception. That committee had even won an award for the
groundbreaking work it had done. The committee had brought forward
recommendations only to have its work overturned by the “zeroes” [those who are
determined to have a zero per cent tax increase] who failed to show up for the
meetings or provide any input. She was done.

Judy Bryant and Nancy Branscombe agreed. They too had served
on the committee; sometimes it was hard to get a quorum.

Branscombe had chaired it from the beginning but it was a
disappointing exercise. In the end, all the work was undone by people raiding
the reserves and hiding behind an in
camera session. The idea that money would drop out of the sky was
ridiculous, she exclaimed. As she spoke, Bud Polhill leaned behind Bill
Armstrong to whisper to and giggle with Joe Swan.

Denise Brown noted that there was not a resolution on the floor.
She put forward a motion to go for zero, and Orser promptly seconded it.

Bill Armstrong indicated that no way would he support the
motion; hundreds of people would lose their jobs.

At this, Orser felt he was personally being attacked and
demanded an apology, but Armstrong declined. The mayor intervened to say that “hundreds
is only your opinion” and that “it has not been determined how many jobs will
be lost.” But he didn’t deny that jobs would be lost, and this from someone who
campaigned on creating 10,000 new jobs.

Swan put in his oar. He does fundraising for Orchestra
London and the private sector has told him that they are cutting back by 20%.
Giving a 3.8% increase to the city made no sense. If people couldn’t accept the
decision of the council for a zero per cent increase, they shouldn’t be on the
Service Review Committee. But he knew what the problem was: the council was
composed of boosters and cutters. But the boosters were on the Service Review
Committee and the Cutters on the Investment and Prosperity Committee, which he
chairs. They were on the wrong committees. They should trade places.

And then, looking at Joni Baechler, he continued, “Perhaps I
should have called you a snake, but I didn’t go there, I wanted to be more
respectful.”

There were a few other speakers before Baechler could
respond. When she did, she pointed out the context of her Snakes and Ladders
analogy. She concluded by saying that she looked forward to the new composition
of the Service Review Committee. I doubt, however, that she will replace it with
Swan’s committee.

At this point, Orser, whom Swan would categorize as a cutter
but is certainly an Orser-booster, suggested that if everyone were a full-time
councillor like himself working so long and hard each and every day on behalf
of his constituents, they could all spend more time together and have a more
harmonious relationship. He even apologized to Armstrong whom he claimed to "love as a brother"; he just didn't want to be tarred with having supported cuts to jobs.

Fontana ignored his comments, but he didn’t miss the
implications of Baechler’s challenge. A few people have worked long and hard at
Service Review Committee, but they are not among Fontana’s eight. If they
resign from the committee, the council will be hard pressed to find councillors
who are willing to put in the time and effort. “Work to rule doesn’t sit well with me,”
he said, suggesting that if people wouldn’t volunteer for some committees it
might just be that council had to appoint them where they were needed against
their will. Whether he was referring to the boosters or the cutters is hard to
say.

In the end, all the debate, argument and name-calling was
for naught. The biggest cutter of them all, Paul VanMeerbergen had failed to
show up and so the council was deadlocked.

The matter now goes to council where a zero target is
certain unless someone else fails to turn up.

I still would like a popcorn machine installed on the third floor, in keeping with the level of discourse at these meetings. This will have the added benefit of forcing the provision of more electrical outlets for observers' devices as they post pictures of the weirdness to facebook.

Gee, only zero? Why not minus 5%? what's so sacred about 0? Oh, that is the collective IQ!!! It would be funny if it wasn't sad. Tell me, who in the private sector would buy a public asset that loses money (convention centre) that if privately owned, would have to pay property taxes, hence, lose even more money? Full time, but part time ability, that's our Orser. And I am waiting for the suggestion to cut across the board. Which penalizes those who are efficient more so than those who are not. Another dumb idea. When they are talking about turning off street lights at night (are you taking note break in criminals?) we are in deep do-do. Yet our clown prince of Mayor wants to shoot off some fireworks in March!! Arrggggh!

It's increasingly evident there are only about 5 or 6 Councillors with the intelligence, work ethic and ethics for the job. There are 3 or 4 that are monumentally unfit for the job. All of this exacerbated by a Mayor who is a great cheerleader but not a good planner or team player.

Kudos to anyone who would take on a Councillor role but this gang is doing irreparable damage to the city. Arbitrary zero tax increases and ad hoc decision making that overrides every master plan we have are just two elements of the several that are making us a laughing stock. Another key one is the subversion of democracy by a cabal of about 8 idealogues who could give a damn what the public think or staff recommend. All topped off by the UTTER lack of preparation by some Councillors who appear to read nothing that comes across their desk.

Sad. something needs to be done. As for the budget, the Mayor and his 0% vanity project will be long gone when future councils have to deal with the fallout of the temporary "fixes" used to get to zero.

White is not among the brighter lights. Unfortunately, some councillors figure getting elected means they are smarter than folks who do stuff for a living. I mean why do any research before you open your mouth?